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Executive Summary
Although it has been argued that the identification of customer needs is a cornerstone of the marketing concept, the accuracy of frontline employees’ perceptions of customer needs has never been examined in a systematic manner. Following research on perceptual accuracy, this study introduces the concept of “customer need knowledge” (CNK), which describes the extent to which a frontline employee can accurately identify a given customer’s hierarchy of needs.

The results of two large-scale, multilevel investigations involving data from three different levels (customers, employees, and managers) demonstrate the importance of CNK for the provision of customer satisfaction and customer value. From this finding, the question arises how companies can manage the generation of CNK. On the basis of a review of the social perception and social cognition literature, the authors identify employee characteristics and relational aspects of the employee–customer dyad as potential antecedents of CNK.

With regard to employee characteristics, the study demonstrates that customer-oriented frontline employees are more likely to determine the needs of individual customers. Moreover, the effect of customer orientation on CNK can be enhanced by providing training in negotiation skills that are necessary for the identification of customer needs. Such training programs are most effective when employees already exhibit a certain level of customer orientation. The results also show that employees with a high degree of cognitive empathy have more accurate perceptions of customer needs. Against expectations, however, the provision of perspective-taking training does not enhance the relationship between employees’ empathic ability and CNK.

These findings underline that the management of frontline employees’ CNK should begin with recruiting and selecting. Specifically, managers should actively screen job candidates with regard to their degree of customer orientation and their empathic abilities. Moreover, training frontline employees in customer-oriented interaction behavior provides them with the necessary skills to practice customer-oriented behaviors.

Finally, the study reveals that the length of the relationship between an employee and a particular customer enhances CNK, whereas a large age discrepancy between them negatively affects CNK. These findings have concrete implications for people placement. Companies benefit from a permanent and clear assignment of frontline employees to individual customers. Keeping employees with customers for longer periods facilitates the accurate identification of customer needs and thus enables the realization of customization benefits. However, this requires that the respective employee is available when his or her customer demands service. Scheduling software, which matches customers’ online appointment requests with the availability of certain employees, might be useful in this context. Moreover, the negative effect of age discrepancy on CNK implies that companies should try to match the frontline employee–customer dyad with regard to age.

Biography
Christian Homburg is Professor of Marketing and Chair of the Marketing Department at the University of Mannheim, Germany. He also serves as director of the university’s Institute for Market-Oriented Management. Since 2007, he has also been a professorial fellow in the Department of Management and Marketing at the University of Melbourne. He holds a master’s degree in Business Administration and Mathematics and a PhD in Business Administration from the University of Karlsruhe, Germany, as well as a PhD honoris causa from the Copenhagen Business School, Denmark. He also holds a habilitation degree from the University of Mainz, Germany. His research interests include market-oriented management, buyer–seller relationships, and business-to-business marketing. He has published in Journal of Marketing, Journal of Marketing Research, Strategic Management Journal, Journal of the Academy of Marketing Science, and International Journal of Research in Marketing. He is also the founder of Professor Homburg & Partners, an internationally operating management consulting firm.

Jan Wieseke is Professor of Marketing and Chair of the Marketing Department at the Ruhr-University of Bochum, Germany. He currently leads the research project “Evaluation of Predictors of Service Quality,” which is supported by a grant of the German Research Foundation (WI 3146/1-2). His research interests center on internal marketing, services marketing, the employee–customer interface, and the application of social identity theory in marketing settings. Jan serves as associate editor of British Journal of Management. His work has been published in outlets including Journal of Marketing, Journal of the Academy of Marketing Science, Marketing Letters, Journal of Marketing Theory and Practice, and Journal of Vocational Behavior.

Torsten Bornemann is a doctoral student in the Marketing Department at the University of Mannheim, Germany. He studied business administration at the University of Mannheim, Germany, at Maastricht University, the Netherlands, and at the Chinese University of Hong Kong, China. He holds a master’s degree in Business Administration from the University of Mannheim, Germany. His research interests include sales management, innovation management, and intertemporal decision making.

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